Where is NFC Headed in the Next 10 Years? Forecast of NFC Industry in 2014-2024

The folks at IDTechEx with strong analysis done by Dr Peter Harrop (PhD, FIEE is Chairman of IDTechEx Ltd) have generated a new report on NFC covering market forecasts and detailed analysis on near field communication technology and players. This NFC report also looks at the applications, global situation, competing technologies and associated timelines.

What is driving NFC’s recent popularity? Currently, NFC is predominantly useful in mobile devices such as phones & tablets for close range transactions/data exchange. The phone becomes an RFID reader or tag. It can read tags on bottles and posters. Over 200 million NFC-enabled mobile phones have recently been deployed: Manufacturers controlling 85% of the mobile phone and tablet market include it.

NFC could never be used in a major way until it was widely deployed in devices. In the last year that deployment has happened very rapidly. Now the questions are what will be the major applications? Who in the value chain will mainly benefit? The world’s leading financial card companies, mobile phone operators, manufacturers, chip makers, consumer goods companies and others are intensely interested and investing strongly.

Many trials of many potential uses of near field communications continue to be generated but they usually are a poor indication of what happens at rollout. To say contactless cards are NFC is playing with words: they predate NFC and would succeed if NFC had never been invented. Let us look more closely at some of these and other aspects:

Largest Deployment of RFID Readers in History

Transportation and retail contactless payment card systems involve well over one million readers compatible with NFC, mostly in retail. Now add NFC-enabled mobile phones and similar devices because they act as NFC readers as well. These will add one million to the global population of NFC- compatible readers making it the largest deployment of RFID readers in the world – say 2 million NFC and NFC compatible readers deployed as soon as 2015 – 10% transport, 40% phones and 50% retail Point of Sale (POS).

The E-Commerce prize is Big but Elusive

Today many e-commerce payments consist of little more than keying in numbers from a card and such card-not-present transactions are a major cause of fraud. Certainly the prize is huge and often very focussed on certain media. For example, the Chinese e-commerce site Alibaba processes about $650 billion in goods yearly and Amazon processes about $600 billion of goods yearly, the size of the GNP of many countries. Worldwide purchase volume over mobile devices could exceed $1 trillion yearly within the coming decade in the view of IDTechEx and several other analysts. NFC-enabled transactions will only get a small share of this over the coming decade but that will still be a big dollar figure.

The very rapidly growing, very large adoption of contactless financial cards will be scarcely dented by NFC-enabled alternatives over the coming decade.

Future Milestones for NFC Adoption

Important milestones in the adoption and use of NFC 2014-2024 are given in the report and some are shown below.

Year 2013 We do not have a tipping point in terms of use of NFC and we are nowhere near to one. Strong commitment by big brands has yet to create success in sale of NFC services. Many have kept the capability almost secret and done little to educate phone purchasers. The service provider typically does not mention it at all to a new purchaser of a mobile phone, and there is usually no NFC educational literature on display or sent to a newly purchased phone.

Year 2018 The percentage of all card payments that are e-commerce rises to 10% by volume and 15% by value but the vast majority do not involve NFC. The majority of contactless e-commerce is still physical cards not NFC but compatible. 13.5 million financial cards on issue, mainly debit.

Year 2023 Sensor fusion: NFC extensively used to leverage other devices such as barometers in mobile phones and tablets etc to provide new applications. A large minority of ticketing on the leading mass transit systems is by NFC-enabled mobile phones.

Year 2024 Applications of NFC beyond payments generate billions of dollars in service income yearly. The majority of e-commerce is still card-related not NFC related. 2.6 billion mobile phones and 0.7 billion tablets shipped most having NFC capability. Over four million NFC readers deployed including card readers and NFC-enabled mobile phones and tablets.

Interested in viewing the entire report? You can order it here. If you have any questions about this report, please do not hesitate to contact our report team at Research@IDTechEx.com or call Clare on +44 (0) 1223 813 703 for queries based in EMEA or Raoul on +1 617 577 7890 for queries based in the Americas, Spain or ROW.